Reading Charts in Real Time

[Gabe2004 10]

One day I hope to trade like Thalestrader

(ie - set my target and stick to them)

As it is I get out of profitable trades too early.

 

I'll try and leave this one alone.

 

Gabe

 

I wanted to close the trade earlier but decided to stick to my guns. In hind sight it was the wrong decision.

In any case, I had a small profit that beats a small loss anytime.

[Gabe2004 10]

I have no idea if this would trigger, but I like the long side of ES maybe for a trade. Short could setup later maybe?

 

Potential entry a 29, stop 25.25 and target at 34.50.

 

 

Hi Forrest

 

What timeframe is this chart?

 

Thanks

 

Gabe

[thalestrader 14]

Sorry for the late post - ES long 1031.25

[forrestang 10]

I have no idea if this would trigger, but I like the long side of ES maybe for a trade. Short could setup later maybe?

 

Potential entry a 29, stop 25.25 and target at 34.50.

 

 

Surprisingly Target Hit!!!

 

Hi Forrest

 

What timeframe is this chart?

 

Thanks

 

Gabe

It was a 15min

Edited September 14, 2009 by forrestang

[thalestrader 14]

Sorry for the late post - ES long 1031.25

 

50% target filled at 1035.75. Stop loss is now at entry, and the profit target for the remaining position is 1040.50

 

Best Wishes,

 

Thales

[forrestang 10]

50% target filled at 1035.75. Stop loss is now at entry, and the profit target for the remaining position is 1040.50

 

Best Wishes,

 

Thales

 

I was thinking this last night......but in your opinion, wouldn't the more logical target be at 1039.50, where the bulk of rejection has occurred recently? Of course your target could be hit, but if you see this in hindsight, what do you think? I am sometimes confused at how I should go about picking a target myself, any help would be appreicated.

 

 

Also, on a general note, why do I still feel like finding a trade everyday is going to be difficult? It seems I do ok hitting a trade most of the time, but I still feel shocked when it works out the way i anticipated, this is not a good emotion to have I would imagine?

Edited September 14, 2009 by forrestang

[thalestrader 14]

50% target filled at 1035.75. Stop loss is now at entry, and the profit target for the remaining position is 1040.50

 

Best Wishes,

 

Thales

 

I cleaned the chart up so as to better see what is going on; and I have moved the stop loss to 1035.75.

 

To summarize, 50% of original long position was closedat 1035.75 on a limit order for +4.5 points (for the tick counters that is +22 ticks). Stop loss on remaining 50% is at +4.5, and profit limit on the remaining longs is 1040.25 (+9.25 points or +37 ticks).

 

I'm done for the day except for this trade. I am heading out and I'll check back in around 3:40PM EDT to see if it is still open, and if so, I will probably close it then. I would expect that between now and then either my stop loss or limit order will be filled, but you never know.

 

Best Wishes,

 

Thales

[subterfuge 10]

you're one of my trading idols, thalestrader.

I've been concentrating pretty much soley on the ES for quite a long time now, and like many others, find it terribly hard. Unfotunattely its my only option as i dont have the money required to trade stocks due to the PDT rule.

 

I love your ES trades. Thanks for posting them.

[thalestrader 14]

I was thinking this last night......but in your opinion, wouldn't the more logical target be at 1039.50, where the bulk of rejection has occurred recently? Of course your target could be hit, but if you see this in hindsight, what do you think? I am sometimes confused at how I should go about picking a target myself, any help would be appreicated.

 

Also, on a general note, why do I still feel like finding a trade everyday is going to be difficult? It seems I do ok hitting a trade most of the time, but I still feel shocked when it works out the way i anticipated, this is not a good emotion to have I would imagine?

 

Hi Forrest,

 

I think your targets, in both hindsight and foresight are very good and better than the ones I used (on the attached chart,I display your targets as the thin black horizontal lines). My targets (thick green lines) were somewhat more agressive than I might otherwise have used, but this long seemed a very high probability to hit both targets. In fact, I am a bit surprised that ES is struggling to print one more tick so as to touch Friday's high. (Isee that during the time I was typing this, ES has indeed exceeded Friday's high).

 

I do not trade the ES everyday. I trade it when it offers a good opportunity. Once in a while I'll even trade it when it is offering nothing, as I did last week, just to keep me humble.

 

The 1031 has been a level of some significance over the last few trading sessions, as can be seen by the blue horizontal line on the attached chart. As ES had two touches there during Globex, a break of that level would likely bode well for the long side.

 

Also, I use Taylor's Trading Technique (full disclosure: as I have mentioned elsewhere at TL, I am a subscriber to richbois's TTT service). Today was a "Sell Short," day in the Taylor cycle, which meant, ironically, that one should be prepared to buy a lower open for a rally to retest the prior day's highs. In fact, the exact quote form richbbois's report that he emailed to me soon after Friday's close said "Monday will be a SS day. We should probably retest the highs before a decline starts." I have used Taylor for several years on my own, as well. Taylor's method is based upon price action, specifically as it plays around prior highs and lows. I have found it to be especially useful to my trading of the ES. You do not need to subscribe to a service to benefit from Taylor's method; I can honestly say that TTT is the only service to which I subscribe, and I do so because the service is very inexpensive, especially given the amount of time and work it saves me.

 

At any rate, I was looking for an opportunity to buy a lower open, and when that opportunity presented itself, since there were high odds of a rally to test the prior day's high, I went a bit more agressive on my targets. Your targets were fine and would have resulted in a very respectable trade.

 

Best Wishes,

 

Thales

[thalestrader 14]

It seems I do ok hitting a trade most of the time, but I still feel shocked when it works out the way i anticipated, this is not a good emotion to have I would imagine?

 

Shocked is good, as it is evidence both of a necessary humility while at the same time chipping away at the innate human weaknesses that prevent most of us from succeeding at anything, let alone trading. Soon, it will give way to "pleasantly surprised." The problems start when when your shock and surprise are replaced by "calm expectation," which is the stage immediatley preceding "self-assured Guru." It is at that final stage that you blow-up, lose all of your capital, and start selling your system on the internet.

 

Be grateful for shock and surprise. After the long struggle I had to get to where I am now, I am very grateful that I can leave an open position, and after playing outside with my four year old son for two hours on a beautiful late summer afternoon, I can come in and feel that same pleasant surprise at finding my profit target had been hit while having fun.

 

I am shocked that I get paid to do this.

 

Best Wishes,

 

Thales

[thalestrader 14]

you're one of my trading idols, thalestrader.

I've been concentrating pretty much soley on the ES for quite a long time now, and like many others, find it terribly hard. Unfotunattely its my only option as i dont have the money required to trade stocks due to the PDT rule.

 

I love your ES trades. Thanks for posting them.

 

Hi subterfuge,

 

Don't hold me to be an idol, trading or otherwise. If you knew how much money I lost during my long apprenticeship you'd now doubt find me more an object of ridicule.

 

I don't trade the ES everyday, but I will try to post the ES trades I do make. Perhaps you can post your trades here as well, with some expalnation on the basis if the trades. Sometimes, the act of trying to expalin your thoughts and actions in such a way as to make an another human being understand you has the salutary effect of making the basis of those thoughts and actions more plain to yourself.

 

Best Wishes,

 

Thales

[forrestang 10]

Shocked is good, as it is evidence both of a necessary humility while at the same time chipping away at the innate human weaknesses that prevent most of us from succeeding at anything, let alone trading. Soon, it will give way to "pleasantly surprised." The problems start when when your shock and surprise are replaced by "calm expectation," which is the stage immediatley preceding "self-assured Guru." It is at that final stage that you blow-up, lose all of your capital, and start selling your system on the internet.

 

Be grateful for shock and surprise. After the long struggle I had to get to where I am now, I am very grateful that I can leave an open position, and after playing outside with my four year old son for two hours on a beautiful late summer afternoon, I can come in and feel that same pleasant surprise at finding my profit target had been hit while having fun.

 

I am shocked that I get paid to do this.

 

Best Wishes,

 

Thales

 

Here are two questions:

 

1)

Right now, with my interpretation of the way you trade, and my application of it, I don't have a set rule I could write down if someone asked me to explain it. I might say something generic like look for a brekout of an area where price has stopped moving directionally, and look for other obvious S/R(This is just an example). So I dont have a specific set of things I see when looking for BOs, it's just a culmination of stuff from the W.F., various other places and this thread. Usually something just jumps out and says, 'here is a trade." So I'm worried I'll see/recognize these everyday.

 

So the question is, if you had to, could you write down trading rules beyond general guidelines(I'm not asking that you do, just if it's possible, or is it nothing more than seeing the same things happen over and over)?

 

2.)

I forgot and can't remember?

 

Substitute Question)

What is your usual win % of hitting a P1? Would you say it's typically less than 50% given the amount of profit you look for?

[thalestrader 14]

Here are two questions:

 

1) So the question is, if you had to, could you write down trading rules beyond general guidelines(I'm not asking that you do, just if it's possible, or is it nothing more than seeing the same things happen over and over)?

 

Could I write down trading rules? Yes, though I am not at all comfortable with calling them "rules." But I do think the way I trade can be communicated in writing. In fact, I believe that it has already been done - by Lefevre, by Livermore, by Baruch, by Darvas, by O'Neil, by Wyckoff, by Schabacker, by Taylor, et al. Support, resistance, trend, consolidation: it is always the same, which leads to the second part of your first question, which is to say, that an effective way to learn to trade in this manner is to observe that the same things happen over and over. Which implies, of course, that no matter what I or anyone else might have to write about trading, no matter how well and clear and lucid the account, reading that material will not translate immediately into the ability to replicate those results immediatley. Trading cannot be learned other than by doing. And doing. And doing.

 

What is your usual win % of hitting a P1? Would you say it's typically less than 50% given the amount of profit you look for?

 

As you are asking about trades involving P1, which I presume is short hand for "Profit Target 1," then you are asking about the manner in which I trade futures. I say this because most of my trades are, of course, individual stock trades, and I do not typically employ profit targets on those trades. I simply trail a stop until stopped out or the market closes. I believe I have mentioned elsewhere at TL that over time, with respect to my stock trades (and I am referring to day trading positions here) I have more losing trades than winning trades. This is not a problem, as my average losing trade currently is 13 pennies/share while my average winning trade is 55 pennies/share. This fluctuates over short periods but has been very stable over a trailing twelve month period. So, while my winning % on stock day trades is only 38% ( a figure that is remarkably stable over time), I maintain solid profitabilty.

 

As far as futures trades, I have posted a good number of trades here at TL, in real time, most prior to the buy/sell stop entry order triggering, some soon after but well before hitting the first profit target. What % of those trades posted have made it to P1? I do not know, but I figure most of them have.

 

You imply that the fact that I am playing for larger P1's perhaps has a detrimental impact upon winning %. I think the fact that I am playing for larger targets actually improves the winning percentage. Though the fact that I am trading based upon observable S/R is what contributes most to any success I enjoy.

 

I am not a scalper. I am not trying to "guess" where the next two or three ticks is likely to be found. I trade for a decent sized swing. Years ago, at a seminar taught by a well known author and "market wizard," said wizard suggested that short term price movement was more easily predicted than longer term price movements. The point this wizard was trying to make was that it is easier to trade for a point or two (this was pre-emini's and the instrument under discussion was the big S&P contract) than it was to trade for 5-10 points. I bought into this for a long time.

 

But I found that once I started to trade for the next main intraday swing rather than trying to grab a point or two (or worse, a tick or two) my results improved dramatically, both in terms of winning percentage and in terms of overall profitability. This change of focus occurred after I decided to try to trade S/R only, and it coincided, by the way, with my movement from the stage of shock to pleasant surprise. That is, once I saw with my own eyes how well I could anticipate price movements based solely upon price action around S/R, it became a relatively easy step to start using S/R as profit targets, and holding for more than a few points, and being able to resist the urge to allow myself to get shaken out on the slightest reaction against my position.

 

Let me give you an example of another trade. I am currently long the 6B. I would have liked to have bought at 1.6587. I missed the opportunity because my attention was elsewhere. However, when I did open that particular chart, I was so sure that price would at least make it to 1.6625, I bought at the market. I was filled on two contracts (which is small - one tick of 6B is only $6.25, but my entry was late and it is the relatively less liquid Tokyo session, so two was enough). My entry was 1.6601, P1 1.6625, TP2 1.6660, and my initial stop loss was 1.6568. As I was typing this, my P1 was filled, my stop loss is now at my entry (not a perfect situation as my entry is not at a good technical position for a stop) but rules are rules, and that is how I manage my futures trades. I have included a screen shot of the chart, the trade blotter showing the 2 contract buy at 1.6601 and the sell of 1 contract at 1.6624. I have a sell limit at 1.6660 pending. Will price get there? I do not know. P2 targets are hit much less often than P1's.

 

I have taken such a round about way to answer your question (finally), because the answer is that I do not often have a futures trade not make it to P1. I choose my trades carefully. I trade when I can see where price is going to go. This is not voodoo or magic or mysticism or anything of the sort. Imagine the shock you feel when the trade goes right. That "shock" is really excitement. It is not unlike the excitement you see in a child's eyes when they at first start to recognize letters, and then words, and then sentences. Eventually the child progresses to the point where she no longer stumbles across unfamilar combinations, and even the most difficult syllables are read and comprehended as easily as breath is drawn. The child reaches the point where she can as easily as you pick up the morning paper and read it aloud with perfect comprehension. Now, imagine you reach the point where you see these trades with the same ease as you read your morning paper. That is the only way for me to explain it. I do have losses. Usually those losses are when I allow my "thinking" to trade, rather than my "seeing." I had such a trade last week. I thought I had a good trade. My daughter saw that I had made a mistake. What can I say, I am human.

 

I would bet that there are one or two folks who regularly post here at TL who similarly enjoy a good percentage of their trades reaching a first scale out level. I would bet that those traders rely primarily on S/R to direct their trades, and I would bet that to get to that point they have spent tens of thousands of hours watching the same things happen over and over again, while simultaneously having the market hand them more than one person's share of humbling.

 

Best Wishes,

 

Thales

[forrestang 10]

 

Best Wishes,

 

Thales

 

Much appreciated for you taking the time to humor my questions with such detail!

 

U're trade u're in, I almost jumped into a simliar trade on GBP/USD a while ago, but didn't quite stand out to me for whatever reason.

 

What you said about P1 and P2, I find that I would hit P1 quite frequently, but I seem to place P1 too far away sometimes. Look at this trade below.

 

I did get into the G/J, I didn't even know it had triggered as I'm watching the game. But now I see it and was able to move my stop close to BE due to a nice swing point. I think maybe a different P1 was in order. Now, I dont like where the adjustment of the natural stop has put my stop. If I cash out on P1, it would at least help me feel better.

 

Aaargh!!!

 

 

Shocked is good, as it is evidence both of a necessary humility while at the same time chipping away at the innate human weaknesses that prevent most of us from succeeding at anything, let alone trading. Soon, it will give way to "pleasantly surprised." The problems start when when your shock and surprise are replaced by "calm expectation," which is the stage immediatley preceding "self-assured Guru." It is at that final stage that you blow-up, lose all of your capital, and start selling your system on the internet.

 

Be grateful for shock and surprise. After the long struggle I had to get to where I am now, I am very grateful that I can leave an open position, and after playing outside with my four year old son for two hours on a beautiful late summer afternoon, I can come in and feel that same pleasant surprise at finding my profit target had been hit while having fun.

 

I am shocked that I get paid to do this.

 

Best Wishes,

 

Thales

This was a worthwhile thread to resurect as it is IMO one of the PRACTICAL threads that I think has helped many of us.

 

Also this quote above is one of the great gems in this thread, I think you painted a good picture of relaxed trading that one can visualize. I try to remain calm, I believe with time and seeing more 'deliberate trades,' pan out successfully, like DB refers to will help greatly.

 

Particularly once one can realize that even a win ratio that isn't 99% will still yield good profitability.

 

Thanks again!

Edited September 15, 2009 by forrestang

[thalestrader 14]

Much appreciated for you taking the time to humor my questions with such detail!

 

U're trade u're in, I almost jumped into a simliar trade on GBP/USD a while ago, but didn't quite stand out to me for whatever reason.

 

What you said about P1 and P2, I find that I would hit P1 quite frequently, but I seem to place P1 too far away sometimes. Look at this trade below.

 

I did get into the G/J, I didn't even know it had triggered as I'm watching the game. But now I see it and was able to move my stop close to BE due to a nice swing point. I think maybe a different P1 was in order. Now, I dont like where the adjustment of the natural stop has put my stop. If I cash out on P1, it would at least help me feel better.

 

Aaargh!!!

 

This was a worthwhile thread to resurect as it is IMO one of the PRACTICAL threads that I think has helped many of us.

 

Also this quote above is one of the great gems in this thread, I think you painted a good picture of relaxed trading that one can visualize. I try to remain calm, I believe with time and seeing more 'deliberate trades,' pan out successfully, like DB refers to will help greatly.

 

Particularly once one can realize that even a win ratio that isn't 99% will still yield good profitability.

 

Thanks again!

 

What do you think about a P1 between 151.30 and 151.40? You have the point you note, and you also have the last little rally high before Friday's close? If I am not mistaken, you entry fill was approx 150.90 and your initial stop loss was about 150.50. So, 151.30, which looked like a reasonably easy target for price to achieve, would give you a 1:1 R/R for the trade. I think that is how I would have traded it. P1 at 151.30, and then P2 between 151.60-70.

 

As a "rule of thumb," if there is S/R in the vicinity of what would be a 1:1 risk/reward, I'll take the 1:1 as my first target. If S/R is beyond 1:1, then I will will certainly play for a greater than 1:1 R/R.

 

Best Wishes,

 

Thales

[forrestang 10]

What do you think about a P1 between 151.30 and 151.40? You have the point you note, and you also have the last little rally high before Friday's close? If I am not mistaken, you entry fill was approx 150.90 and your initial stop loss was about 150.50. So, 151.30, which looked like a reasonably easy target for price to achieve, would give you a 1:1 R/R for the trade. I think that is how I would have traded it. P1 at 151.30, and then P2 between 151.60-70.

 

As a "rule of thumb," if there is S/R in the vicinity of what would be a 1:1 risk/reward, I'll take the 1:1 as my first target. If S/R is beyond 1:1, then I will will certainly play for a greater than 1:1 R/R.

 

Best Wishes,

 

Thales

Thanks for the confirmation. That's usually the thought I have, "is this at least 1:1 R:R?"

 

I think that would have been a much better P1 as you mentioned, but unfortunately didn't notice till after price had retraced from that point. I think now in terms of management, it might be a bit out of order to readjust the target?

 

But if I had P1 right in the first place it would have been easier to hold on to as well. The other numbers you mentioned for Initial stops were about right.

[forrestang 10]

 

I did get into the G/J, I didn't even know it had triggered as I'm watching the game. But now I see it and was able to move my stop close to BE due to a nice swing point. I think maybe a different P1 was in order. Now, I dont like where the adjustment of the natural stop has put my stop. If I cash out on P1, it would at least help me feel better.

 

This was a worthwhile thread to resurect as it is IMO one of the PRACTICAL threads that I think has helped many of us.

 

TARGET HIT

 

I actually mind f*(*-ed myself into the placement of P1, which I initially had at 151.61, I didn't pull it down the better P1 of 151.35. I moved it to 151.48.

 

Well, in the end both targets wound up being hit, shocking!!!

 

Edited September 15, 2009 by forrestang

[ZenMachine 10]

Hi folks, I'm back from summer break.

It's great to see a lot of activities and great insights in this thread. I am so inspired.

 

Long AMT.

Entry is 34.87. (Waited a little too long for the price to move above 20 EMA)

Stop 34.69.

Profit Target 35.55.

[ZenMachine 10]

Moved Stop above Entry.

[ZenMachine 10]

Price moved below trendline. Exited at 34.99. +12 ticks.

[brownsfan019 17]

This was a worthwhile thread to resurect as it is IMO one of the PRACTICAL threads that I think has helped many of us.

 

This is perhaps the best thread on TL if one is willing to spend some time here. Thales gives some great advice w/o a bunch of gibberish, confusing and/or misleading comments which you can find elsewhere.

 

Excellent thread Thales. Hope your trading is going well (I'm sure it is).

[BrianNC 10]

Just found this myself a couple of days ago and I am going to go through it thoroughly.

[thalestrader 14]

Hi folks,

 

Here is current picture of the 6B. I'm not trading it, just taking notes.

 

Best Wishes,

 

Thales

[forrestang 10]

Howdy,

 

Short for G/U.

 

R:R kinda sucks on this one.

 

[thalestrader 14]

One last doodle before bedtime.

 

Best Wishes,

 

Thales